Commission of Investigation – IBRC and matters of significant public concern

I very much welcome the establishment of this Commission of Investigation and my only regret is that this Commission was not established earlier. Significant questions have been raised in recent months in relation to deals conducted by the Irish Bank Resolution Corporation or IBRC and the best and most transparent way to get the necessary answers, both for the Government and the people of Ireland, is through a Commission of Investigation.

I commend Minister Noonan on the approach he has taken to the establishment of the Commission and believe that the proper consideration given to the set-up of this inquiry is reflected in the terms of reference, which, while trying to get to the nub of the questions raised in recent weeks, also aims to limit the scope of the inquiry to the matters of significant public concern, which should ensure that the government gets the Commission’s report in a timely manner.

The decision to have the Commission report no later than the end of this year is very welcome, it will ensure that the work is carried out quickly and thoroughly and that the matter does not drag on for years, a six-month timeframe is adequate and I have every confidence that the matter can be investigated properly in that timeframe.

The Commission of Inquiry faces many difficult decisions in coming months, but one of the most difficult decisions it will have to decide upon is what represented good value for money, both in terms of the sale of SiteServ and other transactions. When one is forced to sell in a firesale setting, it can be hard to comprehend the scale of the write-downs that occur.
Property owners all across the country have come to the hard realisation that the selling price of a property is not always determined by value for money considerations on the part of the vendor.

For many people forced to sell property at the height of the economic bust, the value achieved at sale was only a fraction of the real value of the property, considerations which also influenced the sale price included public confidence, availability of investment funds, national economic performance and outlook and the availability of buyers with the interest, confidence and wherewithal to make the investment.

The need for this Commission of Investigation is prompted by the danger of a public perception that the big player in the market is always at an advantage over the smaller player. There is no doubt that those who have the money to purchase property at the lowest ebb of a recessionary cycle stand to make most as an economy recovers, and that is true all over the world, but what this Commission of Investigation has to decide is if unfair advantage was given to any particular player at the expense of the Irish taxpayer.

Thus, I welcome the elements in the terms of reference that make specific reference to preferential or unduly favourable interest rates and also any unusual share trading. These are important questions that we need answered in the report in six months’ time.

It is only at the benefit of a few years remove that we are really getting to grips with exactly how toxic Anglo Irish Bank was. The state aims to recover its investment in Bank of Ireland, AIB and Permanent TSB. However, there is no such happy ending in terms of the state’s involvement in Anglo Irish Bank. The government has pledged to withdraw from its involvement in the banking market as soon as is practicable, and as soon as Ireland has a properly functioning and competitive banking sector which can serve the people’s interests.

The wind-down of Anglo and Irish Nationwide was promised in the Fine Gael election manifesto in advance of the 2011 election and the vehicle used to achieve this wind-down was the Irish Bank Resolution Corporation. I believe that we must not equate Anglo with the IBRC and must understand that the function of IBRC was to achieve an orderly and timely wind-down of the bank.

The lessons learned during the last decade must not be forgotten. The disaster that was light-touch banking regulation has cost this country dearly and has impacted on the lives of hundreds of thousands of Irish citizens.

Lessons will continue to be learned and that is why I welcome the transparency offered by this Commission of Investigation and look forward to the report that will be published as a result as I believe that it will provide information and clarity in terms of some very significant transactions and adjudicate upon whether or not those transactions were conducted in the best interests of the Irish public.